Stopping taxpayer identity theft is a daunting task

On April 12, 2012

The tax deadline is looming, but some taxpayers won’t get their refund anytime soon because an identity thief stole their identity and refund. I first reported on this issue last year for NewsChannel 5. Often the consumers have no idea how their identity was stolen. Knowing a thief has your social security number and money financially paralyzes you. Now, an Ohio Senator is pushing for change.

Senator Sherrod Brown (D-Ohio) is supporting legislation that would increase penalties for criminals. That’s needed, but there’s also a manpower issue. The IRS admits very few cases lead to a criminal investigation.

Identity theft cases are time-consuming to investigate. Like most federal investigations, the authorities go after the big fish who file multiple fraudulent returns.

Brown also wants to give authorities more tools to fight fraud. Perhaps the IRS needs to get local authorities involved so some of the smaller fish are caught and more consumers are helped.

The IRS also needs tighter security screening. The Commissioner said at at Congressional subcommittee meeting last year that it’s impossible to compare every return from year to year because it would cause lengthy delays.

However, the IRS admits it needs to do better and even apologized to the victims. Some who waited a year or more to get the tax money they were due that someone else stole.

The IRS is also testing a six-digit PIN with some fraud victims. The PIN changes every year for three years and is being analzyed to see if it increases security. There’s the still the issue of getting your PIN. Mail is not exactly the safest means for doing it. Frankly, I’m surprised W-2 forms are still mailed. A thief simply needs to intercept a W-2 to steal your identity.

Until there are answers and better protection, you need to take every precaution to ensure your identity is safe. Check your credit report for free at Annual Credit Report. There are three credit reporting agencies, and you can check each agency’s report once a year for free. To keep tabs on your credit year round, check one report every four months.

Also, shred everything. It’s time-consuming, but can save you time from unraveling an ID theft case.

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